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SSRN Research Paper Series
The Social Science Research Network’s Research Paper Series includes working papers produced by Stanford GSB the Rock Center.
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What Makes Markets Efficient? Some Answers from the Laboratory
This study uses laboratory markets to determine how different types of information or different market structures influence a markets informational efficiency. Unlike secondary data studies of market efficiency, in a laboratory the efficiency of…
Delegation as Commitment: The Case of Income Tax Audits
We study the value of delegating authority over income tax audit policy, arising from incompleteness of contracts. Suppose a utilitarian government’s ability to commit is limited to aggregate dimensions of its audit policy, as publicly verifiable…
Information Aggregation in an Experimental Market
Although the rational expectations hypothesis is widely applied in asset pricing models with differentally informed traders, the extent to which markets actually aggregate and transmit information is an open question. In ths study we report the…
On Auditors and the Courts in an Adverse Selection Setting
We study the role an auditor plays in distinguishing among different bankruptcy-risk classes in a setting in which a lender cannot observe the bankruptcy probability of a borrower. The auditor strategically chooses her work intensity as well as…
Breach of Contract in Agencies
We consider an agency model in which the agent acquires private pre-decision information after contracting. The agent is allowed to breach the contract by paying the principal pre-determined damages. We demonstrate the relationship of this model…
Delegated Expertise
We introduce an expert to the syndicate setting. An expert is, tautologically, one who acquires expertise. We define expertise in terms of private information that is too costly to communicate. When the costs of acquiring expertise are not…
Invisible Resources and Their Accumulation for Corporate Growth
The basic question behind this paper is deceptively simple: why can some firms continue to grow and some firms cannot even under very similar environmental conditions? What is the essential driving mechanism behind successful corporate growth? My…
The Case for Unbalanced Growth of the Firm
For successful long-term growth of the firm, its strategy has to be out of balance with the firms resources from time to time. In particular, the firm needs to overextend itself from time to time, by adopting such a strategy which is somewhat…
Capital Market Efficiency: Definitions, Testing Issues And Anomalies
Research on capital market efficiency continues to have an important impact on the accounting and finance literatures. This paper covers five topics related to market efficiency: I. Alternative viewpoints on what is meant by market efficiency, II…
A Comparison of Corporate Financial Reporting in Japan and the United States
This is a research on how corporate financial reporting practices are influenced by such environmental (to accounting) factors as the capital market institutions, the legal system and management behavior. International comparison provides an…
Necessary and Sufficient Informational Conditions for Pareto-Efficient Risk Sharing in Incomplete Markets
Although, the marginal Lagrange conditions for Pareto-optimal risk-sharing are known, the precise informational requirements of the risk- sharing contracts are not known. This paper determines the minimal structure of such information under…
Stock Return Seasonalities and the "Tax-Loss Selling" Hypothesis: Analysis of the Arguments and Australian Evidence
In this study, we extend the discussion of the tax loss selling hypothesis and also examine the month-to-month small firm return premium for a sample of Australian stocks for the period 1958-1981. Although the basic idea behind the tax-loss…
Common Stock Returns and Rating Changes: A Methodological Comparison
This paper examines the adjustments in a firms common stock price during the eleven months before and during the month of announcement of a bond rating change. Based on several different measures of abnormal security return, the findings are…
A Complete Analysis of Efficient Funds and Full Pareto-Efficiency in Financial Markets
In this paper we develop the complete analysis of the necessary and sufficient conditions for the full Pareto-efficiency of financial markets. We show that full-Pareto efficiency obtains in exchange markets if and only if a type of partition of…
Cost Allocation Games
Considerable recent literature uses game theory techniques to enhance our understanding of cost allocation. These studies typically begin with a setting in which allocation is required and then derive or suggest properties that the required…
A Unified Theory of Syndicates, Aggregation and Separation in Financial Markets
Abstract not available.
Accuracy of Subjective Probabilities for a Financial Variable
Abstract not available.
Citizen Participation in Public Decisions: A Comprehensive Policy-Capturing Approach
This report provides an iterative methodology for obtaining a simple quantitative model of a special interest groups preferences when the group is essentially inaccessible. The context is Social Judgment Theory. Multiple public participation…
FASB Statement No. 8: A Review of Empirical Research on Its Economic Consequences
Abstract not available.